B-128454, OCT. 11, 1956

B-128454: Oct 11, 1956

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 29. PAYMENT WILL BE MADE ON PARTIAL DELIVERIES ACCEPTED BY THE GOVERNMENT WHEN THE AMOUNT DUE ON SUCH DELIVERIES SO WARRANTS. THERE WAS NO PROVISION IN THE INVITATION AUTHORIZING PAYMENT ON ANY BASIS OTHER THAN FOR SUPPLIES DELIVERED AND ACCEPTED BY THE GOVERNMENT AS PROVIDED IN THE QUOTED ARTICLE. THERE WAS INCLUDED IN YOUR BID THE FOLLOWING STATEMENT: "PARTIAL PAYMENTS OF 75 PERCENT ON ALL MATERIAL. LABOR AND BURDEN WILL BE REQUIRED ON THIS CONTRACT.'. SEVEN OTHER BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. ALTHOUGH YOUR BID WAS THE LOWEST RECEIVED AS TO PRICE. SINCE IT WAS CONDITIONED ON A METHOD OF PAYMENT NOT PROVIDED FOR IN THE INVITATION.

B-128454, OCT. 11, 1956

TO LYNCOACH AND TRUCK COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 29, 1956, PROTESTING THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. ORD -20-113-56-1157, ISSUED BY THE DETROIT ORDNANCE DISTRICT, DEPARTMENT OF THE ARMY.

THE INVITATION REQUESTED BIDS TO BE OPENED ON MAY 17, 1956, FOR FURNISHING 382 TRAILERS, CARGO, 3/4 TON, M101 WITH EQUIPMENT, WITH A DESIRED DELIVERY SCHEDULE OF 32 TRAILERS DURING THE MONTH OF OCTOBER 1956, AND 50 PER MONTH THEREAFTER THROUGH MAY 1957. ARTICLE 7 OF THE GENERAL PROVISIONS OF THE INVITATION ENTITLED "PAYMENTS" PROVIDED AS FOLLOWS:

"THE CONTRACTOR SHALL BE PAID, UPON THE SUBMISSION OF PROPERLY CERTIFIED INVOICES OR VOUCHERS, THE PRICES STIPULATED HEREIN FOR SUPPLIES DELIVERED AND ACCEPTED OR SERVICES RENDERED AND ACCEPTED, LESS DEDUCTIONS, IF ANY, AS HEREIN PROVIDED. UNLESS OTHERWISE SPECIFIED, PAYMENT WILL BE MADE ON PARTIAL DELIVERIES ACCEPTED BY THE GOVERNMENT WHEN THE AMOUNT DUE ON SUCH DELIVERIES SO WARRANTS; OR, WHEN REQUESTED BY THE CONTRACTOR, PAYMENT FOR ACCEPTED PARTIAL DELIVERIES SHALL BE MADE WHENEVER SUCH PAYMENT WOULD EQUAL OR EXCEED EITHER $1,000 OR 50 PERCENT OF THE TOTAL AMOUNT OF THIS CONTRACT.'

THERE WAS NO PROVISION IN THE INVITATION AUTHORIZING PAYMENT ON ANY BASIS OTHER THAN FOR SUPPLIES DELIVERED AND ACCEPTED BY THE GOVERNMENT AS PROVIDED IN THE QUOTED ARTICLE.

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID OFFERING TO FURNISH THE TRAILERS AT A PRICE OF $735.69 EACH, OR A TOTAL OF $281,033.58, F.O.B. ONEONTA, NEW YORK. THERE WAS INCLUDED IN YOUR BID THE FOLLOWING STATEMENT: "PARTIAL PAYMENTS OF 75 PERCENT ON ALL MATERIAL, LABOR AND BURDEN WILL BE REQUIRED ON THIS CONTRACT.' SEVEN OTHER BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION.

ALTHOUGH YOUR BID WAS THE LOWEST RECEIVED AS TO PRICE, SINCE IT WAS CONDITIONED ON A METHOD OF PAYMENT NOT PROVIDED FOR IN THE INVITATION, IT WAS CONSIDERED BY THE CONTRACTING AGENCY AS NOT BEING RESPONSIVE TO THE TERMS AND CONDITIONS OF THE INVITATION AND WAS REJECTED. THE AWARD WAS MADE TO THE NEXT-LOWEST BIDDER WHO TOOK NO EXCEPTIONS TO THE TERMS AND CONDITIONS OF THE INVITATION.

IN YOUR LETTER PROTESTING THE REJECTION OF THE BID IT IS STATED THAT YOU HAVE INCLUDED THE SAME CLAUSE IN YOUR BIDS FOR THE PAST TEN YEARS AND, WHEN YOU WERE THE LOW BIDDER, YOU HAVE ALWAYS RECEIVED THE CONTRACT; AND THAT IF PARTIAL PAYMENTS, PRIOR TO DELIVERY, WERE NOT TO BE ALLOWED, WHEN THEY HAD BEEN GIVEN SO FREELY IN THE PAST, A PROVISION SHOULD HAVE BEEN CONTAINED IN THE INVITATION NOTIFYING THE BIDDERS OF THE CHANGE. IT IS ALSO STATED THAT HAD YOU BEEN ADVISED THAT PARTIAL PAYMENTS, PRIOR TO DELIVERY, WERE NOT PERMISSIBLE, YOU WOULD NOT HAVE INSERTED THE CONDITION IN YOUR BID OR, HAD THE BID ALREADY BEEN PLACED, YOU WOULD HAVE REQUESTED ITS WITHDRAWAL.

IT IS A WELL-ESTABLISHED RULE THAT A PUBLIC OFFICER GIVEN POWER BY STATUTE TO ENTER INTO A CONTRACT ON BEHALF OF THE GOVERNMENT WITH THE MOST ADVANTAGEOUS BIDDER, HAS NO POWER TO GRANT THAT BIDDER ANY TERM MATERIALLY BENEFICIAL TO HIM WHICH WAS NOT ANNOUNCED IN THE INVITATION. ALTHOUGH THE INVITATION RESERVED TO THE GOVERNMENT THE RIGHT TO WAIVE ANY MINOR INFORMALITIES OR IRREGULARITIES IN THE BIDS RECEIVED, IT HAS BEEN HELD THAT THE CONTRACTING OFFICER MAY NOT WAIVE NOR MAY A BIDDER BE PERMITTED TO WITHDRAW, AFTER THE BID OPENING, A CONDITION OR QUALIFICATION WHICH IS MATERIAL AND IN ANY WAY AFFECTS THE PRICE, QUALITY, QUANTITY OR LIMITS THE BIDDER'S LIABILITY IN ANY MANNER. IT HAS ALSO BEEN HELD THAT A BID CONDITIONED UPON RECEIVING PROGRESS PAYMENTS, WHEN NOT AUTHORIZED IN THE INVITATION, IS A MATERIAL QUALIFICATION WHICH MAY NOT BE WAIVED BY THE CONTRACTING OFFICER OR WHICH MAY NOT BE WITHDRAWN BY A BIDDER AFTER THE BID OPENING.

IN CONNECTION WITH YOUR STATEMENT THAT ALL OF YOUR BIDS FOR THE PAST TEN YEARS HAVE CONTAINED THE SAME CLAUSE AND YOU HAVE ALWAYS RECEIVED THE AWARD WHEN YOU WERE THE LOW BIDDER, THE DEPARTMENT OF THE ARMY HAS REPORTED THAT A REVIEW OF ITS CONTRACTUAL RELATIONSHIPS WITH YOU, AND YOUR PREDECESSOR, LYNCOACH AND TRUCK DIVISION, GREAT AMERICAN INDUSTRIES, DISCLOSED THE EXISTENCE OF THE FOLLOWING CONTRACTS AND THE CIRCUMSTANCES PERTAINING TO THEIR EXECUTION:

(A) DA-20-113-ORD-11797. THIS CONTRACT WAS AWARDED IN JUNE 1952 AS A RESULT OF AN INVITATION FOR BIDS WHICH PERMITTED ALL BIDDERS TO BID ON THE BASIS OF PROGRESS PAYMENTS.

(B) DA-20-089-ORD-9398FS. THIS CONTRACT WAS AWARDED IN DECEMBER 1950. THE INVITATION FOR BIDS DID NOT CONTAIN A PROVISION FOR PROGRESS PAYMENTS. A PROGRESS PAYMENT PROVISION WAS NOT REQUESTED BY ANY BIDDER AND NO PROVISION FOR PROGRESS PAYMENTS WAS INCLUDED IN THE CONTRACT.

(C) DA-20-089-ORD-15805S. THIS CONTRACT WAS NOT FORMALLY ADVERTISED. WAS AWARDED IN JUNE 1951 ON THE BASIS OF AUTHORITY TO NEGOTIATE. DURING THE COURSE OF THE NEGOTIATIONS, LYNCOACH AND TRUCK DIVISION REQUESTED THAT A PROGRESS PAYMENT PROVISION BE INCLUDED IN THE CONTRACT AND SUCH PROVISION WAS SO INCLUDED.

(D) DA-20-113-ORD-11562. THE INVITATION DID NOT CONTAIN A PROVISION FOR PROGRESS PAYMENTS BUT YOU CONDITIONED YOUR BID ON RECEIVING PROGRESS PAYMENTS AND AWARD WAS MADE TO YOU ON THAT BASIS. A SUBSEQUENT REVIEW BY THE DEPARTMENT OF THE ARMY INSPECTION PERSONNEL INDICATED, HOWEVER, THAT SUCH ACTION WAS NOT NECESSARILY PREJUDICIAL TO OTHER BIDDERS SINCE YOUR BID WAS THE ONLY ONE RECEIVED.

THEREFORE, THE ACTION IN THESE CASES MAY NOT BE CONSIDERED AS PRECEDENTS HERE AND YOU ARE ADVISED THAT THERE IS NO BASIS UPON WHICH WE WOULD BE WARRANTED IN QUESTIONING THE ACTION TAKEN BY THE DEPARTMENT OF THE ARMY IN REJECTION YOUR BID AS BEING NON-RESPONSIVE TO THE INVITATION.